Southbound Funds Net Bought HK$5 Billion as Tech and Large Model Stocks Gained Favor
Claire Weston
Northbound capital net bought HK$5.039 billion on July 16, but the flow split sharply: internet and large-model stocks drew heavy inflows while the AI hardware chain faced concentrated selling — the market is picking sides within the same AI theme.
HK$5 billion of northbound money — where did it go?
Shanghai Connect net bought HK$2.001 bn; Shenzhen Connect net bought HK$3.038 bn — a combined HK$5.039 bn.
Shenzhen contributed over 60%. This means → retail-leaning mainland investors showed stronger appetite for HK-listed tech than the institutional channel.
The flow formed a clear "buy one, sell the other" pattern: large-model names hoarded, AI hardware names trimmed.
Alibaba captured HK$2.8 billion alone — what drove it?
Alibaba (09988) drew a single-day net inflow of HK$2.833 bn, absorbing more than half the day's total northbound buying.
The catalyst: Alibaba's Qwen large model will be integrated into Apple Intelligence, and the China-edition Apple Intelligence filing is complete. In plain terms = Apple picked Alibaba as the "brain" for its AI features in China.
Jefferies noted three positives: validates Qwen's model capability, raises Alibaba's global profile, and should lift Qwen adoption on both edge devices and cloud.
Zhipu, Tencent, Kuaishou, Meituan — how did the other model stocks fare?
Zhipu (02513) drew HK$1.79 bn. Founder Tang Jie unveiled the "Touch High" strategy, committing to AGI research (artificial general intelligence — AI that reasons like a human) over near-term monetisation.
Tencent (00700) drew HK$1.179 bn. Its Hunyuan Hy3 model, launched less than ten days ago, saw total API calls surge more than 68× versus the prior generation, ranking first globally on the OpenRouter leaderboard.
Kuaishou (01024) drew HK$649 mn, conducting buybacks for a third straight day; BlackRock raised its stake from 4.71% to 5.29%.
Meituan (03690) drew HK$294 mn. Citi said Meituan's open-sourcing of its trillion-parameter LongCat-2.0 model reinforces its lead in local services, maintaining a Buy rating and HK$113 target.
Why was the AI hardware chain sold off instead?
Kingboard Laminates (01888) saw net selling of HK$1.172 bn — the most sold name of the day.
YOFC (06869), Hua Hong Semi (01347), SMIC (00981) were net sold HK$211 mn, HK$181 mn, HK$173 mn respectively.
This reflects two layers of concern: first, New York's governor signed an executive order banning construction of data centres drawing 50 MW or more — a US first; second, Shenwan Hongyuan had warned that AI investment faces grid bottlenecks, equipment shortages, and community opposition.
Montage Technology was sold off — what happened?
Montage Technology (06809) saw net selling of HK$144 mn.
On July 15, South Korean prosecutors raided the Korean offices of Montage and two other chip firms, investigating alleged component price manipulation.
The company said it is reviewing the situation, has always operated in compliance, and will cooperate fully. This means → the probe is still at an early stage, but the market has already voted with its feet.
Same AI theme — why is capital picking sides so clearly?
The bull case for model stocks: a cluster of catalysts — Apple choosing Alibaba, Tencent's API-call explosion, and Western Securities noting a domestic-model funding wave that should accelerate iteration.
The bear case for hardware names: offshore policy risk escalating plus stock-specific shocks; capital is stepping aside to watch.
In plain terms = northbound money ran a "trim upstream, add downstream" rebalancing within the AI trade — bullish on the model layer's momentum, but marking down near-term certainty on hardware.
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